Court throws out Thruway Authority lawsuit over faulty wind turbines

Court throws out Thruway Authority lawsuit over faulty wind turbines

Just a few years after the New York State Thruway Authority spent about $5 million on five wind turbines, four of them stand dormant. This is the wind turbine at Thruway Exit 59 at Fredonia.Mark Mulville/Buffalo News

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Jonathan D. Epstein

Eight years after spending $5 million to install wind turbines at four highway exits in Western New York – and five years after they stopped working – the state Thruway Authority has lost its bid to hold five installation contractors accountable, after a state judge threw out its lawsuit.

State Supreme Court Justice Richard M. Platkin in Albany dismissed the 4-year-old lawsuit against CHA Consulting, Kandey Company, Vergnet S.A., Ravi Engineering and Land Surveying PC, and Prudent Engineering. He said the state waited 40 days too long to sue one of them, and also failed to demonstrate that the defendants were responsible for the equipment problems under their contracts with the Thruway Authority.

“The Court is unpersuaded by NYSTA’s arguments,” Platkin wrote, referring to the Thruway Authority.

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The Thruway Authority had alleged negligence, professional malpractice, breach of warranty and breach of contract, as it sought to recoup $8.1 million in damages from the turbine equipment manufacturer, Vergnet, and from the contractor and consultants who installed the two-blade machines in four locations. It argued that the machines did not perform as promised after they went offline between October 2017 and January 2018.

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But after 18 months of evidence discovery and motions, the judge agreed with the defendants that the state had failed to take into account the impact of wind speed and intensity in those locations, which was as much as twice what Vergnet’s site assessment had assumed, and what the company effectively warranted prior to the installation.

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While implying that CHA may have had some responsibility, the judge also said the statute of limitations had expired on the state’s claims against CHA, making that portion of the case moot. Platkin also dismissed various cross-claims filed by the firms against each other.

“Bottom line here is that the state did not do its due diligence in testing the winds to make sure the wind turbines they picked could stand up to the winds,” said attorney Joseph J. Manna of Lipsitz Green Scime Cambria, representing West Seneca-based Kandey, the prime contractor on the project. “CHA was supposed to do that testing, but the state waited too long to sue CHA.”

State officials have not yet decided whether to appeal.

“We are disappointed in the judge’s decision to dismiss the case,” said Thruway Authority spokesman Jonathan Dougherty. “The Thruway Authority was seeking to recover more than $8.1 million for the cost of the failed turbines and to recover damages for negligence, professional malpractice and breach of contract. We are reviewing the details of the decision and will determine our next steps.”

The Thruway Authority hired the companies to install the wind turbines in 2013-2014 as part of a renewable-energy program designed to generate enough power to save the authority as much as $420,000 a year on energy bills. The equipment was put up on authority-owned property in Erie and Chautauqua counties, at Exits 57A, 58, 59 and 61.

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The authority spent $500,000 on design and up to $4.8 million on installation, which was completed in 2015. But the machines stopped working within two years because of mechanical issues, drawing significant attention and criticism, and prompting the state’s lawsuit in November 2018.

Albany-based CHA – formerly Clough Harbour & Associates – served as the design engineer for the project, providing preliminary engineering, final design and construction support. Kandey was the prime contractor, selected through a competitive bidding process, and it hired France’s Vergnet, which manufactured the machines. Syracuse-based Prudent served as onsite inspection engineer, and subcontracted some inspection work to Ravi.

According to the court documents, CHA was hired for multiple engineering assignments across the state, including three for engineering, design and support services for the Western New York wind turbines. That included preparing a feasibility report for the turbines, recommending the appropriate number and size at each site, and completing a design report and the specifications for the project.

In its lawsuit, the Thruway Authority asserted that CHA “failed to render engineering services concerning the Project in a professional, nonnegligent manner,” according to the judge’s decision. But that’s essentially a professional malpractice claim, the judge concluded, which is subject to a three-year time limit.

The Authority claimed the work was not completed until it was certified by the state on Nov. 10, 2015. But CHA demonstrated to the court that its last work on the project was Feb. 27, 2015, and it was paid in full by July 30. And its contract with the state – which began in 2011 and was extended twice – expired Sept. 30, 2015. So the state’s lawsuit was filed just a little too late, the judge said.

Meanwhile, the Thruway Authority had signed a “prime construction contract” with Kandey in January 2013 to “design, install, monitor and maintain” the wind turbine generators – based on CHA’s work and its design specifications. Using those same specifications, the Authority had decided to use a specific Vergnet model – with no substitutes – so Kandey hired Vergnet in July 2013 to supply the equipment for four of the sites.

Vergnet “warranted” that its equipment would work and conform to the contract specifications. But its warranty excluded equipment failures or breakdowns resulting from “inaccurate or incomplete topographical or other site conditions information or data.”

In its agreement, Vergnet had noted that the wind turbulence at the four sites was assumed to be less than 12%. But it also said the lifespan of its machines “is highly sensitive to… wind speed and turbulence level,” and it suggested that actual conditions outside that range could render its machines unsuitable.

In fact, according to wind speed and wind turbulence measurements taken after installation, the actual wind intensity ranged between 18% and 24%. And even the Authority’s own expert later concluded that the specified model of Vergnet turbine “was not suitable for the site conditions,” the judge noted.

The state tried to argue that Vergnet, Kandey, Prudent and Ravi should have exercised judgment in obtaining the correct wind data in advance, when CHA didn’t provide it. But the judge said that was CHA’s responsibility, not theirs, and noted that they had complied with the requirements of their contracts.

He noted that Kandey had supplied the state with the exact make and model of turbine that was requested, and that the state had already accepted Kandey’s performance by 2016. And neither Prudent nor Ravi were involved in the design of the project or selection of turbines.

“All four did exactly what they were supposed to do,” Manna said.

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